Tim Herriage has been helping investors get their deals closed for the past 20 years. Discover his #1 secret to being a successful investor regardless of where their market’s at.

Resources and Links from this show:

Listen to the Audio Version of this Episode

FlipNerd Show Transcript:

Dylan: [00:00:00] Hey everybody. We’re back with another episode of real estate investing secrets. Today, I’m here with a veteran who’s been through every single market you can think of. And he’s gonna share with us the secrets to staying successful. No matter what’s going on around you. Welcome to real

estate investing secrets.

We’re all looking for freedom and the opportunity to live better, more fulfilling lives. But most of us were trained our entire lives to work for someone else and chase their dreams. How can we use real estate investing as a vehicle to achieve financial freedom? My life is dedicated to answering your real estate investing questions and helping you build an investing business that allows you to change your.

And the world around you and to enable you to turn your dreams of financial freedom into a reality. My name is Mike Hambright from flipnerd.com and your questions get answered here on the real estate investing secrets show.

Dylan: Hey, Tim, how you doing buddy?

Tim: Man? I’m great. Dylan, how are you today, man?

Dylan: If I was any better, I’d be [00:01:00] you.

Oh, that’s my line. listen. I, I gotta tell everybody. So I’ve I only met Tim about six months ago, but he’s a good friend of my good friend. Mike Hambright. And, and when I first met Tim, he’s a huge personality. He talks a lot. And so do I, so it’s a big problem when we’re in a room together, cuz we’re fighting over the microphone.

Right? but one thing that I learned early was Tim has been through a lot of different markets and he’s seen. Almost everything that’s gonna happen to most single family investors like us. So I’m super excited to dig in, to see what you think has happened to Tim. But first and foremost, I wanna say that, uh, that Tim is a, uh, uh, a vet.

So he’s a Marine and, uh, we appreciate everything that, that you guys do for us. And every, every sacrifice you guys have made, that was

Tim: my pleasure.

Dylan: So, so give us a little backstory, Tim, how’d you get started in real estate investing,

Tim: you know, I tripped into it when I got outta the Marine Corps, I was just looking for a job and I put my resume on a, on a website that was military hire.com.

And from there, I [00:02:00] got a job as a project manager for a fellow that was owner financing houses and DFW, and was looking for someone to kinda lead his crew. And, uh, you know, it it’s like my grandmother would say I kind of cut my teeth on the business whenever I was a kid. Grandfather, my parents were both realtors.

Uh, so it was a natural fit. And just, uh, I tell my kids and I tell new investors all the time. It’s hard to come in at the tops. You gotta be willing to work from the bottom. And so, you know, I started out as a project manager. Then I became an acquisitions guy. Then I became a sales guy. Then I became a franchisee.

Then I became a partner. Then I started hosting events. Then I started lending money. Then I retired and made a lot of barbecue. And now I’m lending money again.

Dylan: Gotcha. So, so you’ve basically been a contractor, a real estate investor, a buyer for other real estate investors. You’ve hosted big R events and, and nationwide events spoken on a ton of different stages, eating a lot of [00:03:00] barbecue.

And now you’re doing what I guess, what you love to do, right. Cuz this is kind of like the second stage of your career and it’s helping other investors get their deals done primarily. Yeah. I mean,

Tim: you know, this industry, I’ve never. You always hear the cliche, your network is your net worth. And this is an industry that it’s it.

I’ve never seen a cliche that rings so true. It’s I had a lot of great people that poured into me when I was young and, and they took my hard work and. My ethics, my morals, my, uh, the, the Marine Corps always talks about honor courage, commitment. Right. Um, I did right by them and they did right by me. And it, it really has been a 20 plus year rising tide that lifted my boat.

And like you said, Dylan, and I’m, I’m, I’m glad you noticed that. I, I really do try to pour into others and help them make their business better.

Dylan: Yeah. And in the end, and, and I ask this [00:04:00] every single time when, when I’ve got a guest on and we do a show, how important is, is your network? And, and I know like I’ve, I’ve searched through some old YouTube stuff, cuz I always, I always do some recon on, on, on my guests and I was watching Hambright at some event you were running some R like eight years ago and we all look.

Younger and skinnier. And I don’t even know if you had a beard at that event, but it was, it was really grainy and like, you couldn’t even see it, but it’s funny because when I heard you speaking up there, when, you know, you gave the, the beginning of what was going on at the event. And then I heard Mike talking about the market.

Most of the principles haven’t changed, but, but what I saw there was. Um, when I first met you, like I said, Mike said, man, I’ve known Tim a long time. He’s done a lot of great stuff. And like, he’s a wealth of knowledge. This is going back again. I don’t know if it was eight or 10 years. It was, it was a while ago, not a long time ago, but in real estate investing world, that’s a long time ago.

So we’ve been doing this stuff for a long time. Right. And, and that network, you know, look at what you and Mike have grown together. And I, I know that, you know, you’re a big part of investor fuel and you’ve helped a lot of those investors. Getting their deals done. And you’re still, [00:05:00] you’re still doing deals yourself of course too.

But why don’t you, why don’t you rewind it all the way back? And, and I forgot to tell everybody you’re in the DFW market. You mentioned that, but why don’t you tell us about your first solo investment deal?

Tim: I actually, I am not sure I’ve ever done a deal where I was the only Princip. Because I, you know, I, I came from nothing and had to have some partnerships and some joint ventures along the way.

And I guess my partnerships all broke up. Uh sounds awful. Uh, I stopped. Mainly partnering with other people. Once I got married and cuz my wife was in the business too, it’s actually how we met. So it was kind of one of those. I had a partnership with a very large, hard money owner, finance guy and DFW Scott Horn.

[00:06:00] Uh, and we had 63, I think of the number was, uh, owner finance properties. Uh, this. God. Oh five. So 17 years ago. Uh I know there’s probably people listening that aren’t even 17 years old. Uh you know, and I started dating Jennifer. The here’s a funny story, Dylan. So she called the title company. She had just bought a home investors’ franchise.

She called the title company and said, I wanna wholesale this house, but I’ve never wholesale before. Who should I call? And kitty cloud, the title agent said, call Tim heritage. And so she calls me. And we go out and I meet with her and she assigns the house to me and I turn around and I assign it to another investor and I made more money, uh, than she did.

So the joke is we got married to keep it all in the family. Uh, but I mean really, and truly, I mean, from there we joined forces, like, and I put the other partnership on, on, uh, hold. So I’ve actually never been asked that question. I’ve never contemplated. I mean, there’s been plenty of deals that I [00:07:00] signed on.

She didn’t do anything on because she’s not that active in the business anymore, but you know, I, I I’ll, I gotta give her and Scott and all those other people, all the credit, cuz the first six to eight years, I always had a partner.

Dylan: Yeah, it goes back to the, to your network really. And, uh, there’s a guy I do a lot of business with and we partner on, on almost everything, not, not from my side, but more from his side because he’s, he’s kind of retired.

He’s kind of comfortable. He’s kind of lazy, but we trust each other a hundred percent. He. And, uh, and again, those deals, would’ve never come my way. Had I not been in those rooms like you guys are, and we’re still in a lot of those rooms today, you know, locally, I’m still at a lot of different meetups, uh, even after the, you know, the annoying pandemic and, uh, I mean, I’ve, I’ve flown down to Dallas before to, to go to.

TJ’s meetup right with the Sicilian brothers. And I mean, that’s, that’s a long ride just to go to a meetup, but I know that the people I’m gonna meet in those rooms, even if it is online, but I love being belly to belly because that’s where [00:08:00] those real relationships come from. But I mean, you can basically attribute your whole real estate investing career to networking.

Right. And to marriage, of course, which is the ultimate networking.

Tim: Well, yeah. I mean, if, if, if you ever read the book, a millionaire real estate investor by Gary Keller, right? It talks about the latter of success. And, you know, when I got outta the Marine Corps, I had a gunnery Sergeant that gave me rich Dadd poor Dadd and millionaire real estate investor was one of the second or fourth books that I ever read in this business.

And that part just made a lot of sense to me. It was like, oh God, that’s that’s that’s genius. I mean, and, and also some of that’s the military, we’ll talk about improvising, adapting and overcoming, but in the military, part of the chain of command is not questioning the seniority of the people in front of you.

And. Learning, the first thing you learn is you go to your school. So I was in intelligence and they taught us intelligence analysis. And the first thing they tell you, when you get to your first unit is forget everything, you know? Right. Because you know it from a book, [00:09:00] you don’t know it from practical application and.

At that point, the, the NCOs, the staff, NCOs, the officers, they start molding you and shaping you into what you need to be, not what a book says. And I don’t know, I guess I just took that with me into professional life. And I mean, if I had someone that had already been where I wanted to be, uh, or wanted to get to, it only made perfect sense to follow ’em and you know, here we are, 20 something years later, billions of dollars of transactions later.

And I still do the same thing. I find someone that is where I want to be, and I just latch on and I add value to them and they typically add value back to me.

Dylan: Yeah, I, I think, um, a lot of my friends, uh, were in the military right after high school. And, and I think guys or girls who were in the military, or if they were really good at sports and I guess they didn’t have to be all stars, but they really had to buy into that to the team, um, to the team idea.

There’s a hierarchy. Right. And it doesn’t matter what your coach says your coach [00:10:00] is. Right. And I don’t know this because I never served, but I know that if your senior, you know, officer or whatever tells you to do something right or wrong, you’re probably gonna do it. Right. So, so I think you guys have a, have an unfair advantage in business because, um, you understand systems and you understand things that, that civilians or people who.

Weren’t in that team atmosphere understand. And in real estate investing, you have to, you don’t have to, we, we all know lone wolves and that’s cool. There’s guys who are like that, mostly dudes, right? Cuz they got just way too much bravado and testosterone. But man, oh man, I tell you what, when, when you can work together with somebody and all those like Lego pieces fit together and everything’s just smooth and it closes.

Why aren’t we doing more of this stuff? You know? So again, back to networking, back to, you know, back to building, building a team, being part of a team, even if it’s a figurative team. Um, cuz I look at everybody like partners, you know, I mean, I look at you, you’re my podcast partner right now because if we don’t work well together, then neither of us are gonna get anything out of this.

So. I know you talked about, [00:11:00] um, what’s going on today for you guys and how you’re helping investors. So, so tell me, like, show us, uh, paint a picture for us, uh, on your business, what you’re doing right

Tim: now. Yeah. So at RCN capital, that’s kind of my day job, if you will. Uh, I’m the executive director, uh, think of me like an ambassador for the company.

Uh, I host the uncontested investing podcast for us. I had Mike on there last. Um, and, uh, I, I, I go to investor fuel mastermind and, and I, I, I go where the customers are and I talk to ’em and I understand what their challenges are and what their needs are and where my products can help or what products I need to develop.

And I go back to the CFO and the chief marketing officer and the CEO, and I said, Hey, we need to do this. Like, can we do this? How about this? And, uh, I, I, I really. The customer is always right. Um, except when they’re wrong. and, uh, it, it it’s, our job to lending [00:12:00] is super simple, Dylan. It, it has three pillars.

Number one, as a lender, I must make a loan in order to make money. Right. Pretty simple. That’s how I make money. If you’re an investor out there, you must have a piece of property to invest in, in order to make money. It’s just the way it works. Uh, we have to make profitable loans, right? Uh, if, if the, the federal interest rate, the fed funds rate is 8%, which it’s not right now, but I’m just giving an example.

And I loan the money out at 6%. Well, that’s just, that’s not, not a, not a good business model. Right.

Dylan: You’re gonna have to have a lot of origination points.

Tim: Well, but yeah, and in the third pillar is we have to feel like the loan’s going to be repaid. Right? So as long as we make a loan, that’s profitable, that gets repaid.

We make money and it’s really just that simple. And so. Our job. My job is to show the path forward for the company to make more Mon, make more loans, uh, and then to sit with the customers. And [00:13:00] that’s what I love about investor fuel. Cuz when you can sit kind of for a day or two with some, you know, 10 to 20, uh, year transaction folks, they have one set of needs and then you can sit a day or two with some 80 to a hundred a year transaction folks.

They have a different set of needs and oftentimes. I can give them tips to make them a better borrower or they can give me tips to make me a better lender. And I, I, I think, I don’t even know if they know it, but they’re a part of my team because I value what they say. And I, I’m an, I’m a very active listener.

It’s why I comment so much of these, these masterminds. I’m there to learn I’m there and

Dylan: he is the top commenter folks. Let me tell you,

Tim: when I can get the mic from you. uh, but it’s like I’m there to listen and learn. And when I hear someone talk about what they have a problem with with another lender, It’s an opportunity, right?

It’s an opportunity for me to make my company better, [00:14:00] to not repeat that problem. And when I hear someone say something that is going to make them less bankable, we’ll call it. It’s my job to help them understand how to be more bankable. So I think, you know, at RCN, our, our, our ethos is to give free.

Without being salesy and the more I can make someone’s business better, the more likely it is they’ll call me when they have an.

Dylan: Yeah, the, the best. So I wanna dig into RCN more, but the best mortgage guys that I know again, I’m from pre foreclosure during foreclosure, long after foreclosure days were the mortgage guys who were like, listen, Dylan, if I can’t get this done, I’m gonna find someone who can get it done.

And you know, in my, in, in my early thirties, I, I was pretty wise, believe it or not, I don’t know if I’ve gotten less wise, but I would look at that and say, now these are the guys who are gonna survive. Because again, they’re a lending partner. So if they had to find a hard money lender, maybe a private lender, just to connect those people together, to get that deal done, they would do that.

[00:15:00] And, uh, and again, I think the way, what you’re talking about is being, uh, you know, a team member and, and looking at us and, and you together and making your business better, making you better and making the company better, you know, it’s, uh, it’s a huge Testament to, uh, the way that you look

Tim: at business.

Well, as a, as a, as a point to that real quick. Yeah. Yesterday, Kevin Lee, one of your members text. And said, Tim, do you know someone that could close loan fast in Nevada? And we’re not currently licensed in Nevada? I said, absolutely. Send me your email address. He sends me his email address. I email him and this guy named Matt.

That is, uh, one of our correspondent lenders. He actually loaned some of our money and I connect them. I don’t make any money. I don’t make any fees. But the fact that he’ll get Kevin’s loan done means that I’m always the first person. Not always, it it’s more likely Kevin will call me when he needs something

Dylan: and refer you out too.

And, and to me, those [00:16:00] warm referrals, that’s what it’s all about. And, uh, I think as you, as you graduate in business, I don’t care if you’re in the real estate business or if you’re selling widgets, once you start building that and those of us, again, you know, I can see a little bit of gray in the beard.

Like we’re, we’re over 21, right? We’ve been in this business a little while. We know over 21

Tim: years in this business.

Dylan: Yeah. Unfortunately I’m, I’m almost there, you know, Also, but, um, I think we, we know how important that is and to have guys like Kevin Lee, who has become, you know, one of my good buddies because of networking and we can joke online almost every day.

I see his stuff, you know, I’m making comments, but if I need something and he has it, he’s gonna send it my way, vice versa. It’s a, you know, it’s just a strong circle. Um, you know, of, of friends who actually make money together. So that is, uh, you know, that’s a, that’s a real life right now, uh, case study as to what we’re talking about.

But Tim let’s dig into RCN a little bit for the, for the newer investors or even somebody like me. I don’t totally understand what RCN does. So it’s not like a corner bank and it’s not like you’re a mortgage dude. So like how, how [00:17:00] does RCN work and how does it help us as investors? Yeah. So

Tim: we’re trying to avoid the word hard money lender or the phrase hard money lender these days, because there are some negative connotations to it.

Uh, But in essence, we’re a private lender. We operate in 46 states, um, and we provide fix and flip long term rental and ground up construction loans to real estate investors for single family multi-family and mixed use properties. That’s the, that’s the elevator pitch in essence, we’re a direct lender. So we loan our own money out.

So our decisions are made based off of a couple, um, a couple criteria. So one is experience. Um, we will give a first time investor alone, but we’re going to make sure that the LTV is a little bit lower. And the loan to cost is a little bit lower. [00:18:00] Uh, so basically they, that we want them to have more skin in the game we need to, uh, until we get a track record.

And I think it’s important for any listener of any skill to understand. That a track record is sometimes more valuable than a bank account. Uh, because remember the three pillars, right? The last one is I have to feel like I’m going to be repaid. And if I can look on core logic and see that you’ve owned a hundred houses in the last five years, and you have no foreclosures, it makes me feel like I’m gonna get repaid.

Uh, the, the, the second. Is a credit score. So your credit score, even though we, our loans are only to businesses, they’re for business purpose loans. So even though it’s on a residential asset, it’s a commercial loan because we loan to your business, but we look at your personal credit score because again, we just wanna feel like we’re gonna be repaid.

So, uh, we’re gonna look. And if you, if you’re on this call and you’re, or if you’re on this podcast and you’re listening and you have [00:19:00] less than a six 80 FICO score, you’ve got. To get with a credit repair company and be proactive about that because in the lending world, specifically in times, right now where the, the capital markets are getting a little sideways on us, the difference between a six 80 FICO score and a seven 20 FICO score.

Although it’s only 40 points out of 900 is massive. It’s the grand canyon. It’s it’s the difference between qualifying and disqualifying? It it’s I had, I had someone with a 6 79 and I’m telling you. One point lowered his loan, his loan to cost 10%. It’s it’s just, it’s a number. We have to pick a number. We have to be consistent.

Uh, now good for him. He already got some credit repair going and in two months time, he’s already up to seven 50 and that’s how easy it is. You can spend a couple hundred bucks.

Dylan: With the, like, yeah, [00:20:00] it’s more like credit boosting sometimes because you, some of us, you and I have grown up with this. So we’ve been doing probably credit repair for people since we were 20.

Right, right. For our tenant buyers and everything else. Yep. But we’re not taught this stuff in school. This is why we talk about this now. Right. So we talk about financial freedom because they don’t teach us this in fifth grade. So you guys pay attention to what Tim’s talking about right now. Yeah. I

Tim: mean, you may be a 30 year old person that when you were 18 or 19, you had a utility account charge off that got sold to six.

Or, and this was me by the way, when I got outta the Marine Corps, you know, never had paid my own bills. It was, it was, it was a bad credit little period, but the point is there’s one letter you can send sometimes and get these things wiped off. That that one letter will boost your score. 20 points. It it’s just amazing.

Uh, my wife was talking yesterday. We’re very focused on her credit score because we put all the risky stuff in my name and all the investment grade stuff in her name. And, uh, you know, we had an issue the other day where [00:21:00] she had, uh, bought some furniture at restoration hardware for, uh, Airbnb property we have, and that extra $8,000 lowered her point, her score five points and.

There, there there’s probably people listening right now thinking, wow. They watched their score that close. Absolutely. Because when, when you’re dealing in millions and millions and millions of dollars of property and debt, every point on your credit score counts. So I did not come on here to talk about credit repair, but I think.

As we get into tighter financial markets, which is happening with all the interest rate increases in the liquidity crisis on the bond market credit score and properly documenting your experience and track record are, will become par paramount.

Dylan: Yeah. So, so you talked a little bit about that as things start changing.

And again, us old guys, we love to talk about the old days and be careful because it could be coming again. And there’s always a, we know this there’s always a crash coming and there’s always a huge bounce coming. It’s just, is it in five minutes or five years or 50 years. Right. But, um, but [00:22:00] let’s start talking a little bit about this, so, so we can feel a bit of a shift, right?

So for investors, Tim, I don’t. You’re new and you’re listening or watching today, or if you’ve been in the business 20 years, what, what is the best advice that you can give to, to real estate investors? Right now, as we start heading into, um, changing times

Tim: about an hour and a half ago, I got an email from a multi billionaire mentor mine, and one of the sentences in the email is times they are a changing have to be nimble.

And I, I feel like that sums it up for all levels of experience. Exposure, worth net worth liquidity income times are changing, and this is not 2008. This is a completely different, uh, global political, uh, [00:23:00] financial setup. It’s much more like 19 81, 82 than oh eight, but it has a lot of different, uh, uh, components now.

I mean, both times Russia was at war and inflation was at all time highs, but we’re not, we don’t have time to talk about all that. Uh, I would just say that we’ve never had this politically motivated of a fed, uh, for all we know in their meeting in a week or two, they could say, nevermind, we conquered inflation because this, uh, yesterday or earlier this week, the core PCE, which is the main measure that they judge off of was down month, over month and down year over year.

And the whole point is we don’t know what’s going to happen, but here’s what I do know. If you’re actively looking at or evaluating houses, you should be offering less today than you were a month ago. If you’re actively refinancing or keeping or retaining houses, you should count on [00:24:00] paying about twice as much interest as you did this time last year.

And you should expect your lenders to begin to look for more liquidity, more BA more money in the. Or require more down payment. Um, if you were borrowing money at 80% in the last couple months, you’re not anymore. And, uh, you have to be really careful. Relationships are going to matter for the next month.

To a year and we don’t know how long, you know, we’ve got midterms coming up and the, the, the nation’s kind of become political and who knows, they may, we may avoid a prolonged recession. We need a prolonged recession and ultimately interest rates. Aren’t that high historically speaking. Um, I remember when you borrowing money for rent houses at the bank at 9% was a great deal.

Right? Hard money was [00:25:00] 18% and with two points and we all made a ton of money. So things are changing. The hedge funds are pulling back open doors, Zillow, orchard, the IBUs. That’s sucking some demand out of the marketplace. Higher interest rates is sucking some demand outta the marketplace. Um, investor appetite is sucking some demand outta the marketplace.

So we are still historically undersupplied. But. Do you have some knee jerk reactions for a couple months where sellers start slamming their, their, their values through the floor. Hoping to be the last to cash in before the bubble burst. And if you, if you’re listening, I’m doing air quotes right now. If you can’t see this , uh, Because I don’t feel like we’re in a bubble.

I look at replacement costs a lot. Um, and you, and you would have to have labor and materials, both drop over 20%. Yeah. 30%. It’s wild. Yeah. Yeah. I mean, so I, I, I feel good about the 12 to [00:26:00] 24 month prospects, but look, the, the federal reserve spent all year, last year saying they would not over. If inflation was not transitory, they would not overreact.

They’ve overreact. Right. And now, uh, they’ve, they’ve, they’ve almost tripled the fed funds rate and you gotta remember, we were at negative overnight rates last year, negative, uh, and they’ve said they wanna get the fed funds rate into the three. And now they’ve started selling their bonds into the market.

And I think that’s the biggest danger we have right now. Dylan is if bonds start. Not trading. So, you know, if, if you’re listening, I’ll give you a 30,000 foot view, every mortgage that Fannie Mae or Freddie Mac, um, uh, guarantees ends up being all packaged into these big AR residential mortgage back securities and sold into [00:27:00] the secondary.

And what caused the crash of oh eight was in August of oh seven, a couple subprime mortgage bonds did not trade, which means it’s a $500 million. It split up into a hundred pieces and investors buy ’em. So that’s the only thing that we’re worried about right now is, is there’s been a couple bonds that have been hard to fill.

Which if they’re not being filled, you have to raise rates to make them more attractive.

Dylan: Yeah. Can, when you say filled, explain really quickly. Oh, I’m sorry, what you mean by filled? So there’s an empty bucket that they’re trying to fill right. With

Tim: cash. So subscribed. Right. So, okay. Imagine I have a hundred dollars and I split it up all into $1 bills.

Well, there’s a certain piece of those. Well, there’s a, actually, there’s a certain piece of that a hundred dollars and it’s gonna be $5 bills. Those are the triple a, the highly rated stuff, right? Uh, that everyone wants, uh, there’s gonna be some $2 bills and some $1 bills. And, uh, my job as an issuer is to go out and [00:28:00] get enough bond, investors, banks, private investors, hedge funds to buy those bonds.

Um, and the way you do that is through ratings and through. Basically interest rates and coupons. And, uh, so the triple a part, the part that never loses money, right. That may sell for 2% right now. Uh, whereas the triple B part, that’s kind of the, the riskier pieces that may sell for 6%. Uh, it’s, it’s super complicated, but the bottom line is.

Liquidity and market risk and hesitation is nearing all time highs, consumer sentiment in essence. Um, and so it’s just something we have to watch. It, it it’s, it’s a wild card. I don’t think we get there, but it is a wild card.

Dylan: So you talked about buying deeper and I, I know that you’re not like a, a sales trainer for real estate investors, but you’ve been around a long time.

You’ve done a lot of deals. This is something I talk about all the time is, is learning how to buy [00:29:00] lower. And as, as you’ve seen, and I’ve seen the mad rush of new real estate investors come into the market. They’re locking properties up right at, at too high of a price kind of screw up to market for the guys and girls who’ve been around a long time, but for, for some of those, um, intermediate investors who have done a few deals and they’re kind of like ready to get to that next level.

When you talk about buying, buying lower or buying cheaper, like what do you have any advice for those, those investors on how to get better prices? Um, on housing when the whole world thinks that their houses are still worth way more than we know they.

Tim: Yeah. I mean, I think, you know, you have to be armed with data with good comps.

Uh, you know, for instance, there’s a house in McKinney, Texas right now that we AC we’ve signed a contract on a month ago. And when we signed a contract on it, the, the comps were pointing above 3 75 and today they’re pointing at 365. Uh, that’s the pending listing. And we’re trying to verify with the agent.[00:30:00]

What’s it under contract for, because it could be three 50, it could be 3 75. So I think, you know, when I go all the way back in my career, when I used to be the guy that was belly up at the table, I, I, I, I would share, I always would just share the comps. Like, no, look, Dylan, you know, Mary Jane said she sold her house for four 20, but she took 4 0 5 and she paid two realtors for that.

Right. And she paid part of

Dylan: their closing account. Right. Let’s get down to the bras tax. Yeah. So

Tim: I think it’s, I think it’s data it’s also, uh, it, it, it comes down to what you said, sales training. You you’re going to need to sharpen your ax. To where, uh, you, you feel more prepared to, uh, have the conversations from a point of a.

Dylan: I totally agree. I think that in this super hot market, there’s two things I’ve, I’ve talked, um, with, uh, with my guests about. And one of them is that [00:31:00] networking. When I, when I first joined investor fuel, as an example, you know, and a lot of the guys around the shore are investor fuel and, um, Uh, members, but they would almost laugh at me because I was still doing a lot of meetups and, and hosting them, uh, you know, around town.

And I talked a lot about building your own meetup and building those relationships and building your buyer’s list up and not building a buyer’s list to have 10,000 people on there who are aren’t buyer, who aren’t buyers that’s useless, but, but really starting to create relationships. Because for me, I get a lot of deals because of relationships.

Again, I’ve been in the business since 2003, almost as long as you. So I’ve weathered those storms and you just see each other and you. And there’s Tim there’s Dylan. We can do a deal together. There’s no question. Right? So I’ve seen in the last year that changing a lot, because some of the bigger companies who are, um, who are involved in investor fuel the owners, uh, they have like relationship managers now, which you haven’t heard about that in years and years and years, because people didn’t spend money on Christmas parties during the bad days for like a decade almost.

Right. So I think like you said, networking, of course with lenders is I. [00:32:00] But having that, that relationship. And then, and then, um, you know, moving to the other side, like we just talked about, it’s learning how to sell and learning how to sell isn’t again, the, the toothpick in, in the, you know, in your teeth and trying to sell somebody, a car with a bad transmission, like they do up here in Detroit.

Right. Cause that doesn’t happen down in Texas, but, um, but it’s, it’s really understanding how to talk to people and community. And like you and I today, and I’m not kidding. We could go door knocking, whether it’s down by you or up by me, we could put a deal together today by the end of the day, because we’d sit down, we’d find out what these people need, and there’d be other investors who couldn’t, uh, you know, get them to a new place or build a handicapped ramp or whatever it was, or find money today to get them, you know, moved on quickly.

And, and, um, I think everyone’s been on a one track, which has been to the moon. So now it’s time, you’re gonna have to dig in, roll your sleeves up and learn how to really do this business. And again, this business is all about people, unless you’re a gazillionaire, but then you still need [00:33:00] people to manage your money, right?

Yeah. But it’s all about people

Tim: and, and an important thing that we’ve had a lot of conversations at RCN capital, because I mean, look everybody. And another thing is every, I tell the loan officers this every morning and I’ll tell the listener, this. Everyone involved in the real estate investor ecosystem is being affected and impacted by the current, uh, financial climate and what you cannot do.

And the, the kiss of death, if you’re struggling is stopping advertising and prospecting. Uh, Henry Ford once said a man who stops advertising to save money is like a man who stops a clock to save time. Right. It’s just it it’s. And, and, and I tell you, dear listener, I tell you this from experience because I’ve been the guy that panicked and tried to stop.

The [00:34:00] bleeding, right? Try to stop advertising and, and, or stop losing money or stop spending money. And there’s always opportunity. There’s always demand, but there is no opportunity without a lead or a prospect. And I’m not saying that you have to spend the way you were spending, but. I, I highly recommend if you’re in this business and you’re worried, or you’re struggling, number one, get a mentor or a coach, or at least a friend that’s been there before.

And number two, don’t shut off your life. Blood. Unless you’re willing to start not door knocking, right? Like that is a form of advertise. It costs you money. You, it costs you time. Therefore it costs you money. Like if you’re going to stop generating new business, you’re going to you, you better have a plan to get new business.

If that makes any sense.

Dylan: Yeah, no, I can’t agree more. Like I said, you gotta, you gotta roll your sleeves up. But the other thing is, [00:35:00] um, and I think I just read, Hambright wrote a little story about this. Like, you can’t stop because if you have no bullets in your gun and you can’t shoot that deer, the family ain’t gonna eat.

Right. And it’s easy for us to say because we’ve been through it, but I don’t care what you have to do if you don’t, if you can’t eat that day, that’s okay. But you have to keep. Getting new people in front of you, right. Because what does happen? And, and this is, uh, I don’t know if it’s negative, but it’s not super positive, but the, the people who are newer, the people who haven’t weathered these storms, the guys and girls who are gonna pull their chips off the table.

Now they’re outta my way. So now when we talk about buying deep at deeper discounts, if I’m the guy, again, like you said, bellying up to that, that kitchen table. I don’t have eight other people telling the seller they can get 10 or 20 more grand for ’em because they cant. So now we kind of wash that away and, uh, the stronger gonna survive this market is not gonna be like, oh eight, like you said, we’re always, we’re always gonna be shifting and changing, but there won’t be a hard crash like that because there are too many things that led to that and the government, um, I don’t blame the government, but they didn’t step [00:36:00] in super quickly back then.

Oh, 6 0 7 because I saw it happening. I saw the blood and I mean, we, we were, you know, shooting fish in a barrel and that was great back then, but it won’t be that way today, but I do think you’re gonna have to be a better business person all, all the way around and be well rounded from your network to your, to your lender network, you know, to, to the people that you do business with every single day and learning right learning and growing all the time.

You’re at events all the time, learning and grow. You’ve been learning for a long time. Same thing as me. So, you know, not that we’re the two smartest guys in the room, but we’re the two smartest guys on this podcast right now. That’s

Tim: guaranteed. and I think the point is, is you have to be in the room, right?

The minute, the minute you take yourself out of the room. You you no longer have the opportunity. You won’t know when it starts back. You won’t know when things get improved, you won’t, you know, and, and, and just last week, my acquisitions team had emailed me and said that they, they were very confident. We were getting [00:37:00] this other house in Garland, Texas.

And, um, we were offering like one 50 something. And, uh, they told me this morning or yesterday, I can’t remember that we were outbid by $50,000. Right. So. So we were out bid more importantly by 33%. That’s insane. And I just told my team, I said, calm, Ben, we’re gonna lose some deals. Right. But we’re not going to be stuck with deals.

We’re not going to have losses. Right. We’re and you don’t know if that’s someone that has their head in the sand and has no way of closing. And if that happens, and this happened to us and Mike was the king of this. When they come back to you, they have nothing to, I mean, if they liked your offer before, they’d love your offer now.

Right. And so I had to tell ’em the other day I said, look, you know, we, we, we just gotta be okay to lose and I’m okay to lose right now. I’m okay to lose a little bit [00:38:00] of a couple deals. Maybe not convert at the same margins or, or not, not margins ratios. And, uh, as long as I know I’m being smart and I am.

Well, not smart, thoughtful and proactive that that’s, that’s the key. I’m not, you’re heading, you’re heading the sand and your butt in the air. You’re gonna get your tail kicked.

Dylan: That’s I think that’s a Texas saying folks. I haven’t heard that one before.

Tim: I heard Ron the grand say

Dylan: that from the stage. Oh, Oh, just last month.

Isn’t that funny that we’ve been guys like you and I have been listening to LA grand for 20 some years now, but, uh, yeah, it’s crazy. Um, but it, it’s absolutely true, you know, uh, you, you can’t have, ditis, it’s really hard for new people. And again, if I’m your acquisitions guy and you’re like, Nope, 20 grand lower, Nope.

20 grand lower, Nope. 20 grand lower. It’s like, ah, you know, cause I’m not making any money now. So we have to keep that balance and it is tough, you know? And that’s, that’s part of being able to weather these storms. But I think the, the better the investor, the, the happier they are, that storms do [00:39:00] come because there’s nothing.

And you talked about this in the bond, um, markets, there’s nothing worse than a flat market. And I come from, you know, a flat market, you know, Detroit hasn’t been Detroit’s way better than it’s ever been in the last 50, 60 years, the city itself. However, It’s Michigan’s not growing. Right. How about Austin?

Right? How about Dallas? Like you guys are ridiculous. You’re busting at the seam. People are moving in every day. So people like me, I, you know, I live in, I live in that nimble world, so, so I’m ready for it, you know, and I’m excited, but we want the other listeners and, and, and viewers and people who follow, um, what’s going on here.

We want them to be ready too. We want you guys to be, you know, to, to ready to be ready to attack at the right

Tim: time. You know, a couple things from the military. And I know we’re running short on time. Uh, in the Marine Corps, we always said, improvise, adapt and overcome. And it’s just because when you’re going into combat or, or, or a combat like situation, an, an unknown, you don’t really know you can’t plan [00:40:00] for everything.

So you’ve gotta be nimble. You’ve gotta be willing to. And the other thing we, cause we’d say Sempra Gumby, right. Always flexible. Right. And that’s, I think those two things really. Are important today. Um, and, uh, and what you really have to do is don’t measure yourself off of social media, um, and what other people are saying they’re doing, uh, have your mission, decide what it is you’re trying to accomplish and just stay focused on that.

And I think you’ll find that even a crisis like this, uh, my favorite thing is the Chinese symbol for chaos and opportunity are identical. And I think that summarizes the next three months better than anything.

Dylan: Yeah. And I, I was gonna ask you, Tim, what the best advice is over the next three months, but I think you just gave it to us.

It’s it’s se Gumby and, and, uh, give us the, your three core principles again for the Marine Corps. Oh, uh,

Tim: honor. Courage and commitment.

Dylan: On our courage and commitment. So we’re gonna, we’re gonna have all the [00:41:00] stuff in the show notes below all the books that we talked about today. But, um, if you guys are not already subscribed, make sure that you subscribe to the show, whether it’s on audio, through iTunes or, or Spotify, or if you wanna, um, if you wanna subscribe to the YouTube channel, all the links are below, but more importantly, Tim, I wanna know from you, what’s the best way for our listeners and Watchers to

Tim: get in touch with you.

I am on every single platform at Tim heritage. So just at Tim heritage, you can find me, I even TikTok Dylan. Yeah, I can

Dylan: tell listen, all, all of a sudden, all the kids are gonna be leaving TikTok, right? Just like they left every other platform. Cuz us old guys are coming on board to try to make some money off that baby.

Tim: Yeah. And all of our, all of our, uh, lending handles are at RCN underscore capital. So, uh, we love to connect and you know, we wanna be your partner in the life cycle of the business, which means that we’re not gonna make a loan that we think you’re gonna lose money on. And uh, you know, well, if we can’t help you we’ll point you in the right direct.[00:42:00]

Dylan: Yeah. And as I said, I’ll have links to all of Tim’s stuff below in the show notes. Um, and, uh, and if you’re just listening, so it’s, it’s at Tim har, so it’s T I M H E R R I a G E. Right Tim. Yep. And, uh, you know, you guys can find him on the gogs, he’s all over the place, but, uh, Tim, you got any last words for our, uh, for our subscribers?


Tim: uh, you know, I, I I’ll just say this. I believe in the laws of attraction. And this is a scary time. If you read headlines. It’s an exciting time. If you’re around people with positive attitudes and big goals and ambitions. So the company you keep, I think over the next couple months, or year will be a big determination on the levels of success and happiness you have in your life.

So I’d say just, just stick with people that are giving good advice, sound advice, and, uh, being positive. And we’ll see you on the [00:43:00] other side of.

Dylan: Perfect. I could not have said it any better than myself. So for me, Dylan Tanaka, your favorite real estate investor for Metro Detroit. And from Tim heritage, we will see you guys on another podcast.

Thanks for listening to today’s show. There are three ways I can help you start or grow your real estate investing business. If you’re a new investor in just getting started, the flip nerd investor coaching program is the most effective program in America. I’ve been coaching and mentoring new real estate investors for 10 years.

And my students have literally purchased thousands and thousands of properties. Many of them started with little to no experience at all. Our program is a paint by numbers program, where we tell you exactly what to do week by week to make sure that you don’t get distracted on your way to results. We show you how to build a real business, not just create another job for yourself.

New memberships are limited. You can learn more and. Or schedule a call [00:44:00] with me and my team at ner.com/coaching. If you’re an experienced investor doing a minimum of 10 deals a year up to 500 deals a year or more, or have a multimillion dollar real estate portfolio already, you should check out our powerful investor fuel real estate investor mastermind over a hundred of the nation’s leading real estate investors are members and it’s not uncommon for our members.

To two to five X their business, just from getting around other members at investor fuel at investor fuel. Each of us are business advisors to one another’s businesses, but we don’t stop at business. We focus heavily on becoming better people and living fuller lives. If you’re looking for fuel for your business or fuel for your life, please check out investor fuel.com.

Applications and interviews are. As most investors are not a fit for our community. Please learn [email protected]. [00:45:00] If you’re not ready for coaching or masterminds, but eager to start learning more about investing, please join our private Facebook group by visiting ner.com/facebook. New members get access to free training from us right [email protected] and it’s a community to safely.

Ask your questions, a great place to get started. Simply go to Flipnerd.com/facebook to request your access today.

Copy link
Powered by Social Snap